Government gives IBM billion dollar deal

Five-year IT contract the biggest ever for the Australian Government.

Global tech company IBM has signed a five-year deal with the Federal Government believed to be worth $1 billion.

The whole-of-government agreement will give all Federal Government agencies access to IBM technologies.

“As a major buyer of IBM’s products and services, the deal enables us to maximise the return on our ICT investments and ensures that taxpayers are always getting the best possible value for money,” said Minister for Human Services and Digital Transformation, Michael Keenan.

Keenan also explained that the contract, which is the highest value IT procurement contract ever negotiated by the Australian government, utilised the government’s “bulk-buying power.”

Previously, individual government agencies would have to negotiate deals with suppliers, which resulted in differing prices.

While the deal is certainly another example of the government supporting large tech suppliers, there is hope for SMEs, with Keenan promising “the deal has also been structured to enable small and medium-sized firms to engage with IBM through ‘channel partner’ arrangements to ensure they also benefit.”

Managing Director IBM Australia & New Zealand, David La Rose said the deal was reflective of IBM’s strong relationship with the government.

“This agreement is a testament to our forty-year partnership with the Australian Government,” he said.

“We look forward to helping the Australian Government to re-define the digital experience for the benefit of all Australians.”

The hefty contract comes less than two years after IBM’s 2016 Australian Census fail, when four denial of service attacks forced the Australian Bureau of Statistics to shut down its site.

Following the incident Prime Minister Malcolm Turnbull blamed IBM for failing to meet the required standards, saying “I have to say — and I'm not trying to protect anyone here at all — but overwhelmingly the failure was IBM's and they have acknowledged that, they have paid up and they should have.”

IBM were made to pay $30 million in compensation following the incident.

Previously, IBM has also come under fire from the government for a failing to deliver a Queensland Health payroll scheme on time and on budget.

The episode resulted in a two-and-a-half-year lawsuit, which the Supreme Court eventually dismissed, ordering the Queensland Government to pay IBM’s incurred costs.

Edward Pollitt

Edward Pollitt After starting as an intern for Information Age in 2017, Edward is now a full-time journalist with the publication. He covers a range of topics that relate to the technology sector, with a particular interest in start-ups, digital transformation and cyber security.